Commentary on the economic , geopolitical and simply fascinating things going on. Served occasionally with a side of snark.

Wednesday, March 26, 2014

Greek Government, And Bailout Deal, On Verge Of Collapse Due To Definition Of "Fresh Milk" ....... The multi-bill of reforms agreed with the troika last week is due to be tabled in Parliament on Friday, with the government still scrambling to find a compromise with MPs and dairy farmers who oppose the proposed lengthening of fresh milk’s shelf life from five to around 10 days because it is seen as helping cheaper imports at the expense of local producers.

Greek Government, And Bailout Deal, On Verge Of Collapse Due To Definition Of "Fresh Milk"

The Greek economic collapse, depression and bankruptcy has seen many odd things in its brief and often times violent history (in those days when the violent elements were not on strike), but this surely is the first time when one of the countless Greek bailouts may be on the rocks due to the disagreement over the definition of "fresh milk." No, really. Reuters explains that Greece's government risks another rebellion over bailout terms this week after milk producers lobbied against a move to free up prices as part of efforts to make the economy more competitive. Basically, for Greeks, milk is fresh if it is 5 days old or less, yet according to the always fascinating codex of the Troika, "fresh" can be labeled anything that is as old as 11 days.... including the salmonella bacteria it contains. What's worse, is that the "spoiled milk" scandal, far from a joke, has swept over the country, and now even threatens to topple the government.

The country's international lenders want it to ditch rules, such as limiting the shelf life of fresh milk to five days, that effectively deter importers.

But Greek dairy producers and lawmakers representing farming constituencies are fighting the move to call milk up to 11 days old 'fresh' - the latest in a long line of last-minute disruptions to Greece's bailout reviews with the European Union and International Monetary Fund.

Six lawmakers from within the ruling coalition - three from Prime Minister Antonis Samaras's New Democracy party and three from the Socialist PASOK - have opposed the proposal that will be submitted to parliament on Friday as part of an omnibus reform bill that Greece must pass to secure bailout aid.

If they vote against it, Samaras and PASOK leader Evangelos Venizelos could be forced to expel them, further reducing the government's slim majority of just 153 seats in the 300-seat assembly.

In other words, there is a possibility that Samaras' government, which nearly brought down the Eurozone after the summer of 2012 elections were almost won by the "anti-bailout" Samaras, will have no choice but to expel enough people from his party to leave it without an absolute 50%+1 majority, and potentially lead to a government collapse! All because of the definition of fresh milk.

Yup: it sure sounds like the European "Union."

The bill - which will pave for the way for up to 10 billion euros ($14 billion) of aid - is expected to pass after last-minute wrangling, but the row has highlighted how powerful lobbies can undermine the country's bailout lifeline.

"You don't need to be an expert to understand that extending the shelf life is aimed at allowing milk from abroad to be labelled as fresh," PASOK lawmaker Mihalis Kassis told Greek radio at the weekend. "If that's a prerequisite by the (EU/IMF) troika then we deserve what we get."

The controversy has captured headlines and days of debate on Greek television, overshadowing expectations that the country will soon be able to raise money on bond markets again.

"It is unfair and saddening, at a time when Greece is spreading its wings to emerge from a rut, that there is such dissonance," Samaras said during a trip to Brussels on Friday.

"MPs drowning in a glass of milk!" the daily Ethnos wrote on its front page on Saturday. "Spoiled milk" proclaimed the center-left Eleftherotypia newspaper's headline.

Why are foreign exporters so interested in penetrating the Greek milk market? Simple: prices. "Greece is the only country in Europe that has legislation to determine the shelf life of fresh milk and the price, at around 1.30 euros per litre, is among the highest in the EU. The Paris-based Organisation for Economic Co-operation and Development (OECD) says Greeks paid about a third more for dairy produce than the EU average in 2012."

One would think that the Greeks would welcome the competition from abroad, and that the lower price would be a good thing. Well, if cow farms and milkmen account for a substantial portion of the Greek GDP, not to mention employment pool, which apparently in Greece they do, it becomes clear why the nation which is now a complete and utter economic disaster quarantine area, would be leery of allowing any foreign influence to raise its already laughter inducing unemployment rate.

So aside from that, the Grecovery is on pace.

and......

Coalition seeks accord on milk

The multi-bill of reforms agreed with the troika last week is due to be tabled in Parliament on Friday, with the government still scrambling to find a compromise with MPs and dairy farmers who oppose the proposed lengthening of fresh milk’s shelf life from five to around 10 days because it is seen as helping cheaper imports at the expense of local producers.

Seven government lawmakers, including Alternate Agricultural Development Minister Maximos Harakopoulos, have expressed severe reservations about the proposed change. As a result, the coalition is seeking a way to appease the dissenting deputies and milk producers. Locally produced milk accounts for about 35 percent of what is sold on the Greek market. One of the options being considered is to create a new category of fresh milk that will have a shelf life of just three days, which means it would only be open to milk from Greek farms.

Sources said the government would also agree to help dairy farmers access European Union funds that would help them upgrade their machinery and facilities.

Several of the lawmakers who have declared their opposition to the government’s agreement with the troika to liberalize the milk market repeated their objections on Monday. “I can’t believe some people are saying this is no big deal,” said PASOK’s Thanos Moraitis. “The country’s production base is a big deal. That is what’s at stake.”

His PASOK colleague, Michalis Kassis, was even more outspoken in his comments. “I regret the day I decided to support this government,” he said. “Let [PASOK leader Evangelos] Venizelos throw me out. He would be doing me a favor.”

The coalition hopes it will be ready by Friday to submit the legislation to Parliament with the aim of MPs voting on the multi-bill, which will likely have three articles, on Monday.

On Tuesday SYRIZA accused the government of “hiding” the details of its deal with the troika as there has been no official statement on what agreement was reached. The leftists said the coalition was trying to keep lawmakers in the dark for as long as possible to secure enough votes to pass the legislation.